An examination into employee fraud - Free Essay Example

Sample details Pages: 8 Words: 2313 Downloads: 9 Date added: 2017/06/26 Category Law Essay Type Cause and effect essay Did you like this example? Running head: Employee Fraud Topic: Employee Fraud Name: Course: Instructorà ¢Ã¢â€š ¬Ã¢â€ž ¢s Name: Date: Abstract Employee fraud is a grave problem facing many organizations globally. This paper outlines the dynamics of employee fraud. It attempts to analyze the problem of employee fraud in business enterprises. It explains what employee fraud means and what causes employee fraud or rather what motivates employees to commit fraud. It also looks into the procedure of detecting employee fraud. Finally it suggests various ways of curbing the problem; the regulations, standards, control measures and ethical requirements that must be put in place, to ensure that this vice does not clip the ability of businesses to flourish. Key words: Fraud, employee, employer, pressure, rationalization, embezzlement, conspiracy, forensic. Introduction Employee fraud is one of the most serious issues undermining business success in the world. Following a great number of major scandals lately, there has been a lot of dedicated research and attention being channeled into the fight against employee fraud. Regardless of the number of employees or the type of activities that a business enterprise deals with, each business globally is highly susceptible to employee fraud. Employee fraud is a high risk vice to the business enterprise because it leads to huge and significant losses to the business. The losses incurred by the business are in terms of financial losses and damaging of the public image of the business. For instance, many clients will not trust their investments with a business enterprise which cannot safeguard even its own resources from malicious employees. The clients will express doubts on the ability of the same malicious employees to manage their investments prudently. Comprehension of the dynamics of employee fraud, what causes it, how to detect it and how to prevent it is necessary to reverse the increasing number and i ntensity of scandals related to employee fraud. One of the various researches on the issue of employee fraud was conducted by Price Waterhouse Coopers (PWC). According to this global economic crime study of 2009 by PWC, it was observed that the current economic turbulence is responsible for the polishing of the art of employee fraud leading to the emergence of fraud incidences of great magnitude. The number of employee scandals was also noted to be on a steep incline. Consequently this attracted a lot of attention both from the employers and the general public who were oblivious of the gravity of employee fraud in business institutions. To the employers this had the effect that it instilled a sense of caution when dealing with the employees (Timon, 2009). The employers were also forced to put in place aggressive professional regulations and ethical standards to safeguard the image of the business institution by preventing business fraud. Many business owners shifted their attitud e on the business audit process being a financial records verifying process to being a way of fraud detection and prevention (Vitalija, 2011). Employee fraud Employee fraud is defined as the deliberate misuse of the assets and resources of the employer for the employeeà ¢Ã¢â€š ¬Ã¢â€ž ¢s personal enrichment by taking advantage of ones position in the organization. Employee fraud can also be described as any deed or deeds carried out by a worker in an organization, a contractor contracted by the organization or at third party entity trusted by the organization that causes financial losses or has the potential to cause financial losses to the organization. Employee fraud is also referred to as embezzlement, occupational fraud, workplace fraud or internal fraud. Employee fraud is usually confused with terms like ignorance, negligence and error. However, employee fraud is different from these forms of unethical conduct in the sense that fraud is usually intentional and premeditate d or calculated with the intention of deception (Brent, 2012). Employee fraud is not only hazardous to the organisation, but also has negative impact on the national and global economy as well. It is estimated that a U.S. business loses an average of 5%-7% annual income through employee fraud (Vitalija, 2011). This means that the economy of the country also suffers a 5%-7% setback (PWC, 2009). One of the most controversial scandals involving employee fraud is that of two former employees of the JPMorgan Chase bank. The scandal was popularly referred to as the à ¢Ã¢â€š ¬Ã…“London whale scandal.à ¢Ã¢â€š ¬Ã‚  The scandal cost the bank $6.2 billion. The employees falsified books and records relating to trading losses. The employees were subjected to criminal prosecution in New York in 2013 (Vitalija, 2011). Causes of employee fraud The most successful way to deal with employee fraud is to focus on ways of prevention. The process of preventing employee fraud is by a great exte nt cheaper and consumes less time resources than dealing with the aftermath of the fraud scandal. To efficiently prevent employee fraud, it is necessary to understand what causes employee fraud (Brent, 2012). A majority of people hold the notion that greed is the prime motivating factor for employee fraud. In order to demystify these misconceptions about employee fraud, a criminologist Dr. Donald Cressey came up with a concept known as the fraud triangle (Joseph, 1997). This model that helps to understand what motivates an employee to commit fraud was based on intensive and extensive research on workplace fraudsters who he referred to as à ¢Ã¢â€š ¬Ã…“trust violators.à ¢Ã¢â€š ¬Ã‚  According to the fraud triangle, there are three factors that must exist to necessitate the commission of employee fraud. These are pressure, opportunity and rationalisation (Brent, 2012). The first factor; pressure, refers to presence of non-shareable financial need (Joseph, 1997). This is the prim ary motivation behind employee fraud. Pressure describes a financial obstacle that the employee cannot handle at his or her present financial status. This includes personal problems like inability to pay the bills, a gambling addiction, drug addiction or desire to have a better car or house. The obstacle may also be a professional obstacle like the requirement to meet the output targets at place of work and the requirement to improve productivity to earn and maintain investor confidence (Joseph, 1997). Since the employee cannot solve this hurdle this problem through any transparent means, he or she starts to consider an alternative way of solving it probably through an illegal means such as pilfering or misappropriation. The second component of the fraud triangle is opportunity. Opportunity refers to the means through which the employee intends to solve the problem that he or she is faced with. It describes the way the employee anticipates to use or her position to help him or he r to overcome the hurdle. It is at this stage that the employee determines which the best way is to commit the illegal act with minimal risk of being caught (Joseph, 1997). The employee is fully aware that the act they intend to execute is not appropriate. They know that they are at a risk of being prosecuted or lose the job or both if their actions are discovered. Therefore they are cautious to do everything in utmost secrecy (Brent, 2012). If they involve someone else they are likely to use a form of an arbitrative motivational means to buy their silence. A good example is where a bank employee gets access to unfilled cheque leaves. The employee may perceive this as an opportunity to use their position to steal the funds. He or she may do this by writing the cheque to him or herself. However, there is still a chance to be caught if this bank employee is not the one who will process the cheque. Therefore he or she will either need to be the one who processes the cheque or liaise wi th another employee of the bank who will process the cheque. The two can then share the funds according to a sharing formula that is agreed upon by them (Joseph, 1997). The third component of fraud triangle is rationalization. Most employee fraudsters are not typical criminals (Joseph, 1997). Most of them even do not have a record of criminal activities and the fraud may be their first criminal activity. They are mostly not proud of this act but they view themselves as innocent individuals who are caught up in difficult circumstances. Rationalization involves validating their acts and making them look tolerable and okay to themselves (Joseph, 1997). Most employee fraudsters will give excuses such as hey were just borrowing the money, they had to do it to sustain their family, they had to do it to avoid losing their job or the employer was unfair and he deserved to be defrauded. With these three factors in place, employee fraud may also be fuelled by other factors in the busine ss structure including lack of or poor internal control structures. These may result from lax control measures in the organisation (Steve, 2003). Another additional factor is the situation where the manager overrules the administrative structures and control mechanisms. Since the manager is a senior employee, the junior employees are less likely to question any misappropriation on the part of the manager. Conspiracy between the workers to defraud the employer may also encourage an environment of employee fraud. Finally, treachery involving the employees and a contractor or a third party may also amount to employee fraud (Joseph, 1997). Detection of employee fraud Detection of employee fraud can be accomplished using a number of ways. In the United States of America, 32.4% of the cases of employee fraud are detected through tips, mostly from anonymous sources. 25.4% of the fraud cases are discovered by accident. This is in cases where the perpetrator do not thing through their plan carefully leading to an error that exposes their dirty deeds. Finally, 20.2% of the employee fraud cases are revealed through the audit process. The auditing process may be done for verification of records and balancing of accounts. The audit may also be done for forensic purposes where there are claims of employee fraud or where misappropriation is suspected. It may also be done to confirm allegations of misappropriation where the suspect has denied the claims (Vitalija, 2011). There is a set of unusual activity pointers or signals that aid the forensic auditors to detect instances where there may be the presence of cases of employee fraud. This unusual activity is referred to as a red flag (Steven, 2012). It signifies activities that deviate from the norm that necessitate further scrutiny (Joseph, 1997). These include vicissitudes in the lifestyle of the employee, substantial debt problems, difficult credit situations, altered behaviour trends e.g. drug abuse and gambling addiction, snubbing annual vacation, hesitance to give information to the auditors, employees being involved in recurrent arguments with the auditors, missing altered or copied documents, employees openly denigrating the regulatory bodies and auction of the organisations assets at an undervalued rate (Steven, 2012). These signals cannot be used to infer guilt but they are just an admonition for fraud. There are computer programs in business records analysis packages that help in identifying the red flags and determine the severity of the underlying issues marked by each respective red flag (Timon, 2009). Prevention of employee fraud The process of preventing and avoiding employee fraud is a broad and a comprehensive one. The administration of the organisation bears the highest responsibility when it comes to curbing employee fraud. It starts from the hiring process to the time the employee is inducted into the workforce (Steve, 2003). The first measure to prevent employee frau d is to conduct the hiring process prudently. The administration can do this by ensuring the there is sufficient background checks before the employee is employed. This will help the organisation administration to identify candidates who have a past history of professional misconduct in form of workplace fraud (Steve, 2003). It also helps the employer to determine the tendency of the employee to commit fraud depending on the potential sources of financial pressure. This includes history of drug abuse, addiction to gambling, credit problems, debt problems and divorce and mortgage status (Steven, 2012). The second way that the employer can prevent employee fraud is by scrutinising the candidateà ¢Ã¢â€š ¬Ã¢â€ž ¢s referees. The referees can provide invaluable information about the work ethics of the candidate and save the business from employing a potential fraudster. The third way that employee fraud can be prevented is by establishing and sensitising the workers on a reasonable co de of conduct. The administration should be actively involved in the process of upholding the ethical control mechanisms to set a good example to the rest of the workforce. While this does not deter most fraudsters, it clearly lays out boundaries which when violated would amount to misconduct (Brent, 2012). Another additional strategy that can be employed to prevent employee fraud is identifying and dealing with signs of pressure. Most workers commit fraud because they do not feel appreciated at the workplace. The may also commit fraud if they are under pressure both professionally and personally (Timon, 2009). Therefore, the employer should always be on the lookout for the red flags previously identified. It is always prudent for the organisation to respond to the signs of pressure and addressing them rather than waiting until it is too late (Brent, 2012). In conclusion, cases of employee fraud have been on the rise in the previous years. They cost the economy and the respect ive organisations a huge sum of money. Therefore, this necessitates the need to take the necessary measures through timely intervention (Vitalija, 2011). The success of the interventions solely depends on the willingness of the organisation to address the causes of fraud and deal with these causes prudently to save the organisations from suffering financial losses. References Brent E. (2012).Forensic Fraud: Evaluating law enforcement and forensic science cultures in the context of examiner misconduct. Pp.17-44 Joseph T. (1997). Fraud and abuse: The Fraud Triangle. Obsidian publishing co. pp. 1-56 PWC. (2009). The Global Economic Crime Study. Steve A. (2003). Fraud examination: workplace fraud. Thomson south-western publishing. Pp. 17-26 Steven J., Thomas P. (2012). Red Flags for Fraud. State of New York Office of the State Comptroller. Pp. 1-15. Timon M. (2009). Employee fraud; the internal storm. Pp. 1-3 Vitalija B. (2011). An Empirical Study of Audit Expect ation Gap. Pp. 1-74. Don’t waste time! Our writers will create an original "An examination into employee fraud" essay for you Create order

Movie Review Chewing Gum For The Eyes By Frank Lloyd...

Blog 16 – 4 TV inspired slot games that will certainly tickle you fancy These days everyone seems to love a good adaptation. From book to screen and screen to game, it seems when a product is a hit; it becomes a hit through a variety of different mediums. Not missing out on the all the adaptation fun, the online casino industry has stepped up as a popular platform for licensees to take advantage of. Online slot games were once described as â€Å"chewing gum for the eyes† by Frank Lloyd Wright due to the ease of entertainment they provide, with more players getting their fix of such entertainment in 2016 more than ever. Next time you visit an online casino portal, settle in for a night in front of the small screen and give these TV inspired slot games a try. The Sopranos If there was ever a TV show that lived long in the memory it was The Sopranos, a show that told the story of New Jersey’s most ruthless fictional crime family. The Sopranos is a show that made HBO a must watch channel, with the same effect occurring with several of the world’s biggest online casinos. The Sopranos Slots is commonly considered to be the very best TV slots adaptation currently available. Featuring Paulie, Johnny, Chris, Bobby, Artie, and of course Tony himself, all the imagery used with this 5-reel, 25-payline title will be instantly recognisable. Adding to the atmospheric design of the game is a selection officially licensed video clips that are interspersed within gameplay. If you have ever

Learning Through Observation When Assessing Young Children Free Essays

The value of observation in the assessment of a child is very important because that is how you get to know a child better. While observing how a child interacts with their peers, adults, and how they behave in different settings, you are getting to know the child without speaking to them. It also provides us with information by helping us to determine where a child stands in his or her development. We will write a custom essay sample on Learning Through Observation When Assessing Young Children or any similar topic only for you Order Now This information can be used to put together activities that can help the child’s progress. It also helps educators see what things are right or wrong.When collecting the data we can pick their strongest strengths and help them to continue develop them and branch out to new activities that will help them with any issues they might have and improve in the future. We can learn through observation by writing important details that cannot be notice on a standardized test. Observation is a tool to help us learn about each child, our environment, and our work in caring for children. Also it helps the teacher to identifying the source of a problem (not just the individual child but also his or her environment and the children associated with him/her). Other means of assessments are done once a year. While observing a child you can repeat observations over a period of time can show how a child’s development is progressing. The value of observation is very important to anyone that is in contact with a child to have better understanding of their strength and abilities. Teachers/educators can help a child in a timely manner while other assessments you need to wait for the information to arrive and this could take about six months to a year and sometimes it can jeopardize the child’s development. How to cite Learning Through Observation When Assessing Young Children, Essays

Macbeth Essay free essay sample

This puts Macbeth at a loss for words , they then look at banquo and tell him his sons will be king someday aswell but not him. â€Å"All hail, Macbeth, hail to thee, Thane of Glamis/ All hail, Macbeth, hail to thee, Thane of Cawdor/ All hail, Macbeth, Thou shalt be king hereafter! † (1. 3. 50-53). This is the first set of prophecies the witches made and the start to Macbeth’s downfall. What the witches done to Macbeth with these prophecies to make him commence his downfall was they filled his head with these positive flattering things that made him want to go to extreme measures just to become what the witches proclaimed would happen. Proof that this first set of prophecies commenced his downfall is once king Duncan had named malcom to be king apposed to Macbeth, Macbeth then considered the idea that he should murder Duncan to become king. The second set of prophecies given to Macbeth appeared as apparitions by the three witches and each apparition gave Macbeth a different prophecy. The first prophecy is an armed head which tells Macbeth to beware of Macduff â€Å" Macbeth! Macbeth! Macbeth! Beware Macduff. Beware the thane of Fife. Dismiss me. Enough. † (4. 1. 74-75). The second apparition appeared as a bloody child who tells Macbeth the only person who can harm him is a man not born of a woman. â€Å" Be bloody, bold, and resolute. Laugh to scorn/The power of man, for none of woman born/Shall harm Macbeth. † (4. 1. 81-83). The final apparition summoned by the witches was a crowned child holding a tree that states Macbeth will not be killed until the woods of birnam are at Dunsinane Hill. Be lion-mettled, proud, and take no care/Who chafes, who frets, or where conspirers are. /Macbeth shall never vanquished be until/Great Birnam Wood to high Dunsinane Hill/Shall come against him. † (4. 1. 94-98). These summons created by the witches are a big part in Macbeth’s downfall because they gave him more confidence that he would not be killed . Macbeth believed that these prophecies were ridiculous and that it was impossible for him to happen although he did not think them through because all of these prophecies came true in the end. Although the witches gave Macbeth these prophecies making him over confident and giving him the idea to kill Duncan they are not the only ones to blame, Macbeth’s wife Lady Macbeth also played a big role in the downfall of Macbeth by persuading Macbeth to kill King Duncan. She did this by telling him that if the witches prophecies were to come true and he were to become king he must kill those who stood in the way. She then proceeds to question his manhood and makes him feel guilty for her when she says she would kill her own child if she had promised it to her beloved to do it. What beast was ’t, then, That made you break this enterprise to me? When you durst do it, then you were a man; And to be more than what you were, you would Be so much more the man. Nor time nor place Did then adhere, and yet you would make both. They have made themselves, and that their fitness now Does unmake you. I have given suck, and know How tender ’tis to love the babe that milks me . I would, while it was smiling in my face, Have plucked my nipple from his boneless gums And dashed the brains out, had I so sworn as you Have done to this. † (1. 7. 47-59). Lady Macbeth was fully capable of killing the king herself, she had made a good plot to kill him but she never killed him herself because she claimed King Duncan reminded her of her father. â€Å"Had he not resembled/My father as he slept, I had done ’t. † (2. 2. 12-13). If Lady Macbeth would have performed the murder herself Macbeth would not have been driven mad. After Macbeth killed King Duncan the guilt he felt was taking over his mind, saying that there was blood on his hands that would not come off. Lady Macbeth could maybe have comforted him in this time of need but instead she called him mad nd put him down. Although both the witches and Lady Macbeth were contributors to Macbeth’s death they cannot take all the blame for Macbeths death, Macbeth himself plays a big role in the his tragic death. Macbeth knew killing King Duncan was wrong he was always loyal to the king and Duncan trusted Macbeth greatly but he let the witches get into his head and let their prophecies corrupt his mind without no proof saying he had to kill Duncan to become king. Although Lady Macbeth gave him guilt and questioned his manliness he could have told her no he could have told her no and went with what he knew was best. Macbeth’s ambition to hold his spot on the throne was another good reason as to why he died, after killing Duncan Macbeth decided that he should also kill Banquo because Macbeth thought Banquo would suspect him after the prophecies the witches made. This was a mistake by Macbeth because this only made Macbeth more aggressive and his desire to kill stronger. The main mistake Macbeth made was the faith he had towards the prophecies made by the witches, he felt he was invincible. Even once the prophecy about the Birnam Woods reached the castle he belived he could not be killed by anyone because he thought all men were born of a woman. â€Å"Fear not, till Birnam wood/Do come to/Dunsinane†; and now a wood/Comes toward Dunsinane. ’(5. 5. 43-45) â€Å"Thou wast born of woman. /But swords I smile at, weapons laugh to scorn,/Brandished by man that’s of a woman born. (5. 7. 13-15). This confidence followed Macbeth right to his fight against Macduff, once he began to fight with macduff we learn that macduff was actually ripped out of his mothers stomach and not born from the womb making him not born bt a woman. â€Å"Despair thy charm,/And let the angel whom thou still hast served/Tell thee,/Macduff was from his mother’s womb/Untimely ripped. (5. 8. 13-17). Macbeth then accepted his fate and fought Macduff and lost his life. Although there was multiple factors that led to Macbeths demise such as evil witches and a power hungry wife the one who played the biggest role in his death was Macbeth himself. Even though all of the witches prophecies came true there no proof saying they were destined to come true but only that Macbeth caused these prophecies to be true. If Macbeth would have did what he knew was right he would have saved the lives of a lot of people including the wife he loved so dearly.